Everyone who has a foot in the API world is giddy about Twilio's initial public offering (IPO).  The company issued 10 million shares of stock at $15 a share.  The stock, under the NYSE ticker symbol TWLO, opened at $23.99 a share before moving upward to $24.71 during the day at around 1 PM ET, a surge of over 60 percent.   Does Twilio represent big bucks for the API space as a whole or is this a unique event?

San Francisco-based Twilio counts Uber, Open Table, and Nordstrom among its customers.  In 2015, the company's revenues were around $167 million with a net loss of $35.5 million.  Having raised $150 million, Twilio isn't pressed to be breakeven or cash flow positive, but it would help the stock in the future.  Before opening, Twilio was valued at around $1.23 billion with its price of $15 per share.

USA Today says Twilio is one of around 169 "unicorns," privately held start-ups with market valuations of at least $1 billion.   The company is the first U.S.-based venture capital backed tech IPO for this year and was able to raise the price per share from its initial feel-out of $12 to $14 per share because of significant demand for the stock.

Depending on who you talk to, Twilio is a "cloud communications" company, a telecom company, or an API company.  I think some analysts prefer cloud communications or telecom to API because they haven't evolved enough to think about the power of APIs in order to build applications.  While I get that Twilio does WebRTC for voice and video and also plugs into stock PSTN functions using APIs, it is larger than the traditional telecom vision since there's more than just "phone" going in when you roll in text messaging and other communications without having to touch the legacy phone network.

I would describe Twilio as an API communications company, with the API underlined.  APIs are how companies are building apps today, because it is faster, cheaper and more scalable to get complex functions as cloud services via APIs than to build them from scratch.  With free accounts, SDKs, and usage of an API running to fractions of a penny, it's easy for developers to experiment in a "sand box" then move to commercial scale in rapid fashion.

How fast and easy? Twilio held a "code jam" on the New York Stock Exchange floor today, June 23, with three programmers trying to build as many apps as possible using the company's platform. 

There's recorded video footage you can check out below -  it's not really that exciting - which might be the meta point.  Putting together new applications should be fast, clean, and a bit boring, rather than slow, expensive, and with a lot of drama.

Twilio demonstrates a clear business progression for other API start-up companies.  But the adage of "Be Big, Be Bought, or be Dead" also applies. "Be Big" means an API company can go through an IPO to raise money and provide a financial reward for employees and early investors.  "Be Bought" is self-explanatory; start-ups companies are usually bought by larger, more established firms -- see GENBAND and Mitel for examples of recent merger & acquisition activity.  

There's going to be quite a bit of M&A in the API space over the next five years.  API companies focusing on particular niches, such as communication, will be bundled together with others to build libraries and catalogs of API services. Why mix and match between different API platforms when you can get one stop shopping for most or all of your functions?

"Be Dead" is what it is.  If you don't have a successful business model to build a customer base and generate revenues, your firm -- no matter what it is --will not be operating for long.  Fortunately, most API companies are finding the right balance of unique services and customers to grow and thrive.

The upcoming All About the API conference will bring companies with APIs together with the developers and product managers looking to be where the next opportunity lies. Benjamin Stein, Director of Product, Messaging at Twilio will speak during the three-day event happening July 19-21 at Caesars Palace in Las Vegas.